Reducing costs is an important part of running a business and maintaining profitability. One method of cutting costs is Least Cost Routing (LCR) – an optional feature on merchant facilities designed to help you reduce transaction fees. This feature allows you to choose which network(s) tap-and-go payments are sent through for dual-network debit cards, giving you the freedom to choose the option that’s most cost-effective for your business.

How does Least Cost Routing work?

With Least Cost Routing, when a customer taps their dual-network debit card – a card that has the Mastercard® or Visa® logo on one side and the eftpos® logo on the other – to make a payment, the merchant can choose to send the transaction via the network that costs them the least. If the merchant does nothing, the transaction will go via the default network of the card, typically the Mastercard® or Visa® network.

Least Cost Routing only applies to tap-and-go (contactless) debit card transactions. Should a customer insert or swipe their card at the terminal, Least Cost Routing will not apply. Similarly for any payments using digital wallets or smart phones.

Least Cost Routing allows you to choose the network option (or a combination) that’s best for your business:

  1. Process all eligible debit transactions via the Mastercard®/Visa® network – this is the default option if you choose not to activate Least Cost Routing
  2. Process all eligible debit transactions via the eftpos® network
  3. Set a threshold to route eligible debit transactions based on value

This third option gives you the flexibility to set a transaction threshold limit, which means that transactions up to and including your limit will be processed using your chosen primary network (either Visa®/Mastercard® or eftpos®) and transactions above your threshold limit will be processed using your chosen secondary network (either Visa®/Mastercard® or eftpos®).

What’s the benefit to my business?

Least Cost Routing provides you with greater flexibility and choice in how contactless debit transactions are processed, which can help to uncover the most cost-effective option. Every business is different, your potential savings would depend on your transaction volumes, card mix and turnover.

Our Merchant Support Team can help you understand your current fees and how enabling Least Cost Routing can benefit your business.

Learn more about Least Cost Routing and how it works.

Call the Merchant Support Team on 1800 230 177 to understand your current Interchange Plus costs and learn more about Least Cost Routing.

Get in touch

Things you should know

View Terms and Conditions for Business Transaction and Savings Accounts  and our Financial Services Guide and consider them before making any decision about these products. This advice has been prepared without considering your objectives, financial situation or needs. Before acting on the advice, please consider if it’s right for you. Bank fees and charges may apply. Download the Merchant Agreement Terms and Conditions for more information. 

MasterCard and the MasterCard brand mark are registered trademarks of MasterCard International Incorporated. Visa is registered Trademark of Visa in the United States. Eftpos is a registered trademark of eftpos Payments Australia Ltd.